Arizona's Attorney General stands against a 14% increase in APS rates, indicating potential action touate lower charges.
Arizona Public Service (APS) has filed a proposal with the Arizona Corporation Commission (ACC), seeking an overall net customer rate increase of $579.5 million. If approved, this would mark APS' fourth mortgage rates hike in a decade.
The proposed increase is intended to support various system upgrades, including improvements to substations and grid technology, vegetation management programs, the installation of smart grid technology, and enhancements to the Palo Verde Generating Station and Redhawk Power Plant. The plan also includes expanding battery storage resources, investing in physical security and cybersecurity, and increasing investments in these areas.
APS' formula rate proposal would allow for annual adjustments to rates based on its authorized return on equity, with mechanisms to prevent overearning. The utility has proposed an ROE of 10.7%.
However, Arizona Attorney General Kris Mayes has voiced opposition to the proposed interest rates hike, stating that it could lead to a decrease in the rates Arizona Public Service customers pay. Mayes has also expressed concern that the ACC may be favoring utilities.
Mayes' office has been granted intervenor status in APS' rate case, along with the state of Arizona and other consumer advocates. The attorney general has suggested that the case could potentially result in a decrease in APS rates, as the utility may be earning too much money.
In addition, Mayes has expressed skepticism about the possibility of the ACC ordering a decrease in APS rates due to the commission's perceived friendliness towards utilities. Electric utilities with rate cases decided in 2023 saw an average ROE of 9.6%.
Last year, Pinnacle West, APS' parent company, recorded profits in excess of $600 million, according to Mayes. APS increased rates by 8% in 2024, 8% in 2023, and 4.5% in 2017, as stated by Mayes' office.
Mayes has also expressed concern about the formula rate proposal, stating that it could lead to fewer checks and balances on utilities and fewer opportunities for consumers to oppose rate increases.
The ACC has yet to announce which organization has been granted intervenor status regarding the 14% proposed rate increase by Arizona Public Service. APS looks forward to demonstrating the importance of its investments and ensuring it has the resources necessary to meet energy demands.
Stay tuned for updates on this developing story.
